The Pareto Principle at work

Aug 30, 2021 Features / Columnists, Peeping Tom

Kaieteur News – I learnt an early lesson in human resource management when I was in charge of running a private business. When I was chatting with my predecessor who was about to retire, he told me that every firm tends to be overstaffed but what is important is to know who are your most valuable staff members.
He then asked me who I thought would be the person who was most important to the firm. I said it was me since I was assuming the top job.
He laughed and said I was wrong. He said to me that the most important person is the one who we take least notice of. I asked him who he was referring to and he said it was an office assistant who was responsible for opening the business each day.
I was stunned by this declaration and so I asked him how he came by that conclusion. He said to me that this fellow was never late, was hardly ever sick and even when sick never failed to open the offices on time to let in the early customers. Without him, the firm would have a reputation of being unreliable. He said that this man was more valuable than any other.
But then he said something else. He said that you should identify your critical staff and pay them well. But he warned that this has nothing to do with seniority or rank but which staff member adds the most value to your work and without whom you would not be able to function effectively.
I later learnt of an important principle. It is known as the Pareto Principle or the Law of the Vital Few. It states that 80 percent of the work is done in 20 percent of the time. But there is also another side which is not emphasised and that is that 20 percent of staff do 80 percent of the value-added work.
Most organisations are overstaffed. They are carrying excessive baggage. A recent study found that the majority of workers only work on average three hours the most per day which is 15 hours per week while they are paid for 40 hours per week. However, there is a critical 20 percent which achieve 80 percent of the firm’s total output and these are the core workers of any firm. The first task of any management is not to identify the firm’s objectives but to identify its most important staff in terms of output.
The first task of management is to identify its key 20 percent. It is this 20 percent, regardless of the firm’s objectives, who have to achieve that critical 80 percent of the work. If this 80 percent is not achieved, the organisation will collapse.
The task, therefore, is for every agency, whether it is government or private sector, to identity its core 20 percent of its staff who will be the ones that have to run the organisation and achieve the core goal of 80 percent of the tasks to be done.
Management should take care, as a first priority, of the needs of this 20 percent. These are the people that will go beyond the call of duty. These are the people who will work more than any other. These are the persons on which the future of the organisation rests.
Their needs must be attended to. Not just their needs for salaries. No, they must be well-treated so that there are no distractions. They must be able to devote all their time and energies towards the organisation.
They must be able to do this for five to six years straight, after which they should be replaced and others take their place. This is the secret of successful organisational management.
You can throw away all the text books on management. Look after your 20 percent and you will be in good shape as the owner of a business. The bottom line is if you do not take care of the core 20 percent, they will find other things to do to take care of themselves, and it is the firm which will suffer.
So the next time you are walking into an office and you see the doorman, take a second look. He may be the most important person in the organisation.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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The Pareto Principle at work

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